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Water & Wastewater Commission Review and Recommendation Government That Works for All COA Strategic Direction: December 1, 2021 Commission Meeting Date: Council Meeting Date: Department: Financial Services Department Kevin Critendon December 9, 2021 Client: Agenda Item Recommend approval of a resolution authorizing the issuance by Pilot Knob Municipal Utility District No. 3 of Unlimited Tax Road Bonds, Series 2021, in the amount of $5,000,000. There is no anticipated fiscal impact. Amount and Source of Funding December 1, 2021 — To be reviewed by the Water and Wastewater Commission. Purchasing Language: Prior Council Action: Boards and Commission Action: MBE/WBE: N/A N/A N/A Pilot Knob Municipal Utility District No. 3 (“District”), a political subdivision of the State of Texas, was created under the laws of the State of Texas by House Bill No. 1758, Acts of the 82nd Texas Legislature, Regular Session (2011), Chapter 987, codified as Chapter 8377, Subtitle F, Title 6, Texas Special District Local Laws Code (“Enabling Legislation”), and operates under Chapters 49 and 54 of the Texas Water Code. The Enabling Legislation became effective May 25, 2011, and created the District, subject to the consent of the City of Austin (“City”). The City consented to the creation of the District by Council action taken March 22, 2012 (“Consent Ordinance”) and under the terms of the April 13, 2012 Consent Agreement between the City, the District, and Carma Easton LLC, a Texas limited liability company (“Developer”). The City and the District entered into a Strategic Partnership Agreement dated as of June 4, 2012 (“SPA”), as authorized by Section 43.0751, Texas Local Government Code. The SPA sets forth the terms and conditions of the City’s annexation of the land within the District and frames the terms by which the District will continue to exist as a limited district, Pilot Knob Limited District No. 3 following the City’s full-purpose annexation of the land within the District as provided in Consent Agreement and the SPA. The City is the retail provider of water and wastewater service. The District, which currently contains 677.567 acres of land, is within the extraterritorial jurisdiction of the City in southeast Travis County, Texas. The District is approximately eight miles southeast of the downtown portion of the City, adjacent to the east side of McKinney Falls Parkway and approximately one mile west of U.S. Highway 183. An extension of William Cannon Drive, the initial phases of which are under construction, bisects the District in an east-west direction. Cottonmouth Creek traverses the District in a north-south direction. The Austin-Bergstrom International Airport is approximately four miles to the northeast of the District. The District is required to obtain City approval for all bond sales pursuant to the Consent Agreement. In 2021, City Council approved a bond issuance of $11.39 million for the District. The City has received a request from the District to approve the District’s bond sale in the amount of $5.0 million for the Road proposition. After the proposed bond issue, approximately $40.6 million in authorized but unissued will remain in this proposition, approximately $62.6 million bonds will remain in Water, Wastewater, Drainage proposition, and an additional approximately $7.7 million unissued for the Recreational proposition. The proceeds from the proposed bond sale will be used for (i) reimbursing for the costs of designing, constructing, improving or acquiring, and financing macadamized, graveled or paved roads and improvements in aid of those roads; (ii) funding approximately 18 months’ capitalized interest on the Bonds; and (iii) paying the costs associated with the issuance of the Bonds. The District bonds are the sole obligation of the District until the City full purpose annexes the District. The first eligible date for the City to annex the District pursuant to the Consent Agreement is December 31, 2037. City departmental staff from Austin Water, Housing and Planning, Parks and Recreation, and Watershed Protection reviewed the District’s Consent Agreement and its amendments. The District was found to be in compliance with the terms of the Consent Agreement. The City’s Financial Services Department and the City’s Financial Advisor have reviewed the District’s proposed bond sale and recommend approval.